The 650-lawyer law department of New York City has begun sending hypothetical bills to all the City agencies it represents in litigation. The mock bills detail how much it has cost the City to defend the agency’s cases, which is primarily inside lawyers’ time (See my earlier post today about the Department starting to track attorney time). The goal is to create a greater awareness of litigation costs and to encourage the agencies to do what they can to keep those costs as low as possible. (NY Law J. Aug. 15, 2005)
Every law department that does not charge back the fees and expenses of outside counsel retained to defend the company in litigation could consider this innovative technique. If you can estimate internal hours (and multiply them by your fully-loaded internal cost per lawyer hour), so much the better.